January 18, 2018
Appeal from the United States District Court for the Eastern
District of Pennsylvania District Court Nos.
2-15-cr-00346-001, 2-15-cr-00346-002, 2-15-cr-00346-003,
2-15-cr-00346-004 District Judge: The Honorable Harvey Bartle
G. Foulkes Eric L. Gibson Paul L. Gray Robert A. Zauzmer
Office of United States Attorney Jonathan Ian Kravis [ARGUED]
United States Department of Justice Criminal Division, Public
Integrity Section Counsel for the United States
M. Lee Bruce P. Merenstein [ARGUED] Samuel W. Silver Schnader
Harrison Segal & Lewis Counsel for Appellant Fattah
Flannery [ARGUED] Suite 2700 1835 Market Street Philadelphia,
PA Counsel for Appellant Nicholas
Silber Pashman Stein Walder Hayden Counsel for National
Association of Criminal Defense Lawyers, Amicus Appellant
E. Baylson Barry Gross [ARGUED] Meredith C. Slawe Drinker
Biddle & Reath One Logan Square Counsel for Appellant
W. Asbill Buckley Sandler Glen D. Nager [ARGUED] Jacob M.
Roth Julia W. M. F. Sheketoff Jones Day Counsel for Appellant
Before: SMITH, Chief Judge, GREENAWAY, JR., and KRAUSE,
Fattah for Mayor Scheme ................................. 9
Lord Loan and Its Repayment ..................... 10
College Tuition Component of the FFM Scheme
NOAA Grant and the Phantom Conference 28
Blue Guardians Scheme .................................. 31
Fattah-Vederman Bribery Scheme ................. 33
Indictment and Trial .......................................
Juror Misconduct and Dismissal of Juror 12 ........... 58
Investigation of Alleged Juror Misconduct ........... 58
Dismissal of Juror 12
District Court's Instructions Under McDonnell 70
McDonnell Framework ................................... 71
Fattah's Efforts to Secure Vederman an Ambassadorship
Vederman's Sufficiency Challenge to Counts 16-18 and
Sufficiency of the Evidence for the RICO Conspiracy
Variance from the Indictment and Sufficiency of the Evidence
for Count 2
The District Court's Instruction to the Jury on the
Meaning of Intent
Sending the Indictment to the Jury ...................... 126
District Court's Evidentiary Rulings .............. 129
District Court's Application of Rule 404(b) 129
Evidentiary Rulings Regarding Nicholas's Defense
EAA Board Minutes .................................. 134
Jones' Memory Regarding Other Contracts ..... 136
Exclusion of NOAA Evidence .......................... 137
Cooperating Witness's Mental Health Records
District Court's Denial of Access to the Mental Health
Records ..................................... 140
District Court's Grant of the Motion in Limine
Government's Cross-Appeal ............................
is a Mortgage Lending Business ............. 148
Sufficiency of the Evidence .................................
Fattah's Claim of Prejudicial Spillover ...............
Vederman's Assertion of Prejudicial Spillover ... 160
Fattah, Sr., a powerful and prominent fixture in Philadelphia
politics, financially overextended himself in both his
personal life and his professional career during an
ultimately unsuccessful run for mayor. Fattah received a
substantial illicit loan to his mayoral campaign and used his
political influence and personal connections to engage
friends, employees, and others in an elaborate series of
schemes aimed at preserving his political status by hiding
the source of the illicit loan and its repayment. In so
doing, Fattah and his allies engaged in shady and, at times,
illegal behavior, including the misuse of federal grant money
and federal appropriations, the siphoning of money from
nonprofit organizations to pay campaign debts, and the
misappropriation of campaign funds to pay personal
upon their actions, Fattah and four of his associates-Herbert
Vederman, Robert Brand, Bonnie Bowser, and Karen
Nicholas-were charged with numerous criminal acts in a
twenty-nine count indictment. After a jury trial, each was
convicted on multiple counts. All but Bowser appealed. As we
explain below, the District Court's judgment will be
affirmed in part and reversed in part.
the 1980s and '90s, Fattah served in both houses of the
Pennsylvania General Assembly, first as a member of the House
of Representatives and later as a Senator. In 1995, Fattah
was elected to the United States House of Representatives for
Pennsylvania's Second Congressional District. In 2006,
Fattah launched an unsuccessful run for Mayor of
Philadelphia, setting in motion the events that would lead to
his criminal conviction and resignation from Congress ten
The Fattah for Mayor Scheme
declared his candidacy for mayor in November of 2006. Thomas
Lindenfeld, a political consultant on Fattah's
exploratory committee, believed that "[a]t the beginning
of the campaign, [Fattah] was a considerable . . . candidate
and somebody who had a very likely chance of success."
JA1618. But Fattah's campaign soon began to experience
difficulties, particularly with fundraising. Philadelphia had
adopted its first-ever campaign contribution limits, which
limited contributions to $2, 500 from individuals and $10,
000 from political action committees and certain types of
business organizations. Fattah's fundraising difficulties
led him to seek a substantial loan, far in excess of the new
The Lord Loan and Its Repayment
serving in Congress, Fattah became acquainted with Albert
Lord, II. The two first met around 1998, when Lord was a
member of the Board of Directors of Sallie Mae.
May 15, 2007 primary date for the Philadelphia mayoral race
approached, Fattah met Lord to ask for assistance, telling
Lord that the Fattah for Mayor (FFM) campaign was running low
on funds. Fattah asked Lord to meet with Thomas Lindenfeld, a
political consultant in Washington, D.C., and part-owner of
LSG Strategies, Inc. (Strategies), a company that was working
with the FFM campaign and that specialized in direct voter
contact initiatives. Lindenfeld had been part of the
exploratory group that initially considered Fattah's
viability as a candidate for mayor. Lindenfeld had known
Fattah since 1999, when Fattah endorsed Philadelphia Mayor
John Street. Through Fattah, Lindenfeld had also gotten to
know several of Fattah's associates, including Herbert
Vederman, Robert Brand, and Bonnie Bowser. Herbert Vederman,
a businessman and former state official, was the finance
director for the FFM campaign. Robert Brand owned Solutions
for Progress (Solutions), a "Philadelphia-based public
policy technology company, whose mission [was] to deliver
technology that directly assists low and middle income
families [in obtaining] public benefits." JA6551. Bowser
was Fattah's Chief of Staff and campaign treasurer, and
served in his district office in Philadelphia.
assistant contacted Lindenfeld to arrange a meeting, and
Lindenfeld informed Fattah that he would be meeting with
Lord. Lindenfeld, along with his partner, Michael Matthews,
met with Lord and discussed Fattah's need for funds to
mount an intensive media campaign. After that meeting,
Lindenfeld reported to Fattah that Lord wanted to help, but
that they had not discussed a specific dollar amount.
Approximately a week later, Fattah instructed Lindenfeld to
meet with Lord a second time. Lord "wanted to know if he
could give a substantial amount of money, a million
dollars" to Fattah's campaign. JA1630. That prompted
Lindenfeld to reply that the amount "would be beyond the
campaign finance limits." Id.
proposed a solution: he offered to instead give a million
dollars to Strategies in the form of a loan. To that end,
Lindenfeld had a promissory note drafted which specified that
Lord was lending Strategies $1 million, and that Strategies
promised to repay the $1 million at 9.25% interest, with
repayment to commence January 31, 2008. Lindenfeld later
acknowledged that the promissory note would make it appear as
though Lord's $1 million was not a contribution directly
to the Congressman, although he knew that it was actually a
loan to the FFM campaign. Indeed, Lindenfeld confirmed with
Fattah that neither Lindenfeld nor Strategies would be
responsible for repayment. With that understanding,
Lindenfeld executed both the note and a security agreement
purporting to encumber Strategies' accounts receivable
and all its assets.
1, shortly before the primary election, Lord wired $1 million
to Lindenfeld. Lindenfeld held the money in Strategies'
operating account until Fattah told him how it was to be
spent. Some of the money was eventually used for print
materials mailed directly to voters. And, at Fattah's
direction, Lindenfeld wired a substantial sum to Sydney Lei
and Associates (SLA), a company owned by Gregory Naylor which
specialized in "get out the vote" efforts.
had known Fattah for more than 30 years.During the campaign, Naylor worked as the
field director and was in charge of getting out the vote on
election day. On the final day of the campaign, Naylor worked
with Vederman, who allowed Naylor to use his credit card to
rent vans that would transport Fattah voters to the polls.
primary date neared, Fattah and Naylor knew the campaign was
running out of money. The campaign was unable to finance
"media buys," and Naylor needed money for field
operations to cover Philadelphia's more than one thousand
polling places. In early May, Lindenfeld called Naylor to say
that Lindenfeld "would be sending some money
[Naylor's] way." JA3057. Within days, SLA received a
six-figure sum for Naylor to use in the campaign and on
election day. Naylor used the money to pay some outstanding
bills, including salaries for FFM employees, and allocated
$200, 000 to field operations for election day.
lost the mayoral primary on May 15, 2007. Afterward,
Lindenfeld spoke with Fattah, Naylor and Bowser about
accounting for the FFM campaign money from Lord that had been
spent. They decided that the amounts should not appear in the
FFM campaign finance reports, and Fattah instructed Naylor to
have his firm, SLA, create an invoice. Naylor did so,
creating an invoice dated June 1, 2007 from SLA to FFM,
seeking payment of $193, 580.19. Naylor later acknowledged
that the FFM campaign did not actually owe money to SLA, and
that the false invoice was created to "hide the
transaction that took place earlier" and "make it
look like [SLA] was owed money." JA3075-76. Although FFM
did not owe SLA anything for the election day expenses, the
FFM campaign finance reports from 2009 through 2013 listed a
$20, 000 in-kind contribution from SLA for each year, thereby
lowering FFM's alleged outstanding debt to SLA.
total $1 million Lord loan, $400, 000 had not been spent.
Lindenfeld returned that sum to Lord on June 3, 2007. He
included a cover letter which stated: "As it turns out
the business opportunities we had contemplated do not seem to
be as fruitful as previously expected." JA1254.
Lindenfeld later admitted that there were no such
"business opportunities" and that the letter was
simply an effort to conceal the loan.
2007, faced with financial pressures, Lord asked his son,
Albert Lord, III, to collect the outstanding $600, 000
balance on the loan to Strategies. Lord III contacted
Lindenfeld about repayment and expressed a willingness to
forgive the interest owed if the principal was paid.
Lindenfeld immediately called Fattah and informed him that
repayment could not be put off any longer. Fattah told
Lindenfeld more than once that "[h]e would take care of
it," JA1652, but Fattah did not act. Needing someone who
might have Fattah's ear, Lindenfeld reached out to Naylor
and Bowser. Naylor talked to Fattah on several occasions and
told him that Lindenfeld was under considerable pressure to
repay the loan. Fattah told Naylor more than once that he was
"working on it." JA3082-83.
his political career, Fattah had focused on education,
especially for the underprivileged. Indeed, Fattah founded
two nonprofit organizations: College Opportunity Resources
for Education (CORE), and the Educational Advancement
held the annual Fattah Conference on Higher Education (the
"annual conference") to acquaint high school
students with higher education options. JA3079. Sallie Mae
regularly sponsored the conference. According to Raymond
Jones, EAA's chairman of the board from 2004 through
2007, EAA offered a variety of programs to provide
"marginalized students with educational opportunities so
they could continue and go to college." JA1360. EAA was
funded with federal grant money which could only be spent for
the purposes described in the particular grant. Karen
Nicholas served as EAA's executive director, handling the
organization's day-to-day administrative
responsibilities. Nicholas had previously been a staffer for
Fattah when he was a member of Pennsylvania's House of
was an organization that awarded scholarships to graduating
high school students in Philadelphia who had gained admission
to a state university or the Community College of
Philadelphia. CORE received funding from a variety of
sources, including Sallie Mae. Because CORE also received
federal funds, and because EAA had experience working with
federal grants, EAA received and handled the federal funds
awarded to CORE. In short, EAA functioned as a fiduciary for
CORE. When money became a problem for the FFM campaign,
Fattah's involvement with EAA and CORE soon became less
about helping underprivileged students, and more about
providing an avenue for disguising efforts to repay the
illicit campaign funds from Lord.
January 7, 2008, Robert Brand contacted Fattah by telephone.
Shortly thereafter, Lindenfeld received an unexpected call
from Brand proposing an arrangement for Brand's company,
Solutions, to work with Strategies. Solutions had developed a
software tool called "The Benefit Bank," which was
designed to "assist low and moderate income families to
have enhanced access to benefits and taxes." JA1993.
During the telephone call, Brand referred to The Benefit Bank
and suggested a contract under which Strategies would be paid
$600, 000 upfront. JA1666. Shortly thereafter, on January 9,
2008, Brand followed up on his call to Lindenfeld with an
email about "develop[ing] a working relationship where
you could help us to grow The Benefit Bank and our process of
civic engagement. While I know this is not your core business
I would like to try to convince you to take us on as a
client." JA6427. Lindenfeld responded that he was
interested. To Lindenfeld, "this was the way that
Congressman Fattah was going to repay the debt to Al
Lord." JA1654. When Lindenfeld called Fattah and told
him of the contact from Brand, Fattah simply replied that
Lindenfeld "should just proceed." JA1666-67.
days later, Brand emailed Nicholas at EAA a proposal from
Solutions concerning The Benefit Bank, which sought EAA's
support in developing an education edition of The Benefit
Bank and a $900, 000 upfront payment.
January 31 date for repayment of the balance of the $1
million Lord loan approached, a flurry of activity took
place. On January 24, both Raymond Jones, chair of the EAA
Board, and Nicholas signed a check from EAA made out to
Solutions in the amount of $500, 000. Although no contract
existed between EAA and Solutions, the memo line of the check
indicated that it was for a contract, and Nicholas entered it
into EAA's ledger.
same day, Ivy Butts, an employee of Strategies, emailed
Lindenfeld the instructions Brand would need to wire the
$600, 000 balance on the Lord loan. Within minutes,
Lindenfeld forwarded that email to Brand at Solutions. Brand
then made two telephone calls to Fattah. By late afternoon,
Brand emailed Nicholas, informing her that he had "met
with all the people I need to meet with and have a pretty
clear schedule of what works best for us. I am also seeing
what line of credit we have to stretch out the payments until
you get your line of credit in place." JA6558. Brand
asked if they could talk and "finalize this
effort." JA6558. On January 25 and 26, there were a
number of calls between Fattah, Brand, and Nicholas.
Sunday January 27, at 5:46 pm, Brand telephoned Fattah. At
10:59 pm, Brand emailed Nicholas a revised contract between
EAA and Solutions for the engagement of services. Brand
indicated he would send someone to pick up the check at about
1:00 pm the following day. The revised contract called for
the same $900, 000 payment from EAA to Solutions, yet
specified that $500, 000 was to be paid on signing, with
$100, 000 due three weeks later, and another $100, 000 to be
paid six weeks out. No due date for the $200, 000 balance was
specified. The terms of the contract called for EAA to assist
Solutions with further developing The Benefit Bank. In
addition, under the contract, EAA would receive certain funds
from the Commonwealth of Pennsylvania for a program relating
to FAFSA applications.
same evening, Brand sent Lindenfeld a contract entitled
"Cooperative Development Agreement to Provide Services
to Solutions for Progress, Inc. for Growth of The Benefit
Bank." JA6569. The agreement proposed a working
partnership in which Strategies would work with Solutions to
identify and secure a Benefit Bank affiliate in the District
of Columbia and two other states, and to facilitate
introductions to key officials in other states where The
Benefit Bank might expand. The terms of the agreement
provided that Solutions would pay $600, 000 to Strategies by
January 31, 2008, which would "enable [Strategies']
team to assess opportunities and develop detailed work plans
for each area." JA6572. Brand copied Solutions'
Chief Financial Officer, Michael Golden. Lindenfeld responded
to Brand's email within a minute, asking if Brand had
received the wiring instructions. Brand immediately confirmed
that he had.
that Solutions did not have $600, 000 to pay Strategies,
Golden talked to Brand, who informed him that Solutions would
be receiving a check for $500, 000 from EAA. Early the next
morning, Nicholas responded to Brand's email from the
night before. She advised Brand that he could pick up the
check, "but as I stated I am not in a position to sign a
contract committing funds that I am not sure that I will
have." Gov't Supp. App. (GSA) 1. That same day, a
$540, 000 transfer was made from the conference account,
which EAA handled, into EAA's checking account. The
conference account was maintained to handle expenses for
Fattah's annual higher education conference. Prior to
this transfer, EAA had only $23, 170.95 in its account. EAA
then tendered a $500, 000 check to Solutions, which promptly
deposited the check before the close of that day's
business. EAA never replenished the $540, 000 withdrawal from
the conference account.
received the executed contract between Solutions and
Strategies on January 28. Even though the contract called for
Strategies to perform services in exchange for the $600, 000
payment, Lindenfeld neither expected to do any work for the
$600, 000, nor did he in fact do any work.
by January 28, Solutions had received $500, 000 from EAA, but
it still had to come up with $100, 000 to provide Strategies
with the entire amount needed to repay the Lord loan. Golden
obtained the needed funds the following day by drawing $150,
000 on a line of credit held by Brand's wife. Brand and
Fattah spoke four more times on the telephone on January 29.
Trial evidence later showed that, during the month of January
2008, neither the FFM campaign bank account nor Fattah's
personal account had a sufficient balance to fund a $600, 000
morning of January 30, frustrated by the delay, Lindenfeld
sent Brand an email with a subject line "You are killing
me." JA6430. Lindenfeld stated that he had "made a
commitment based on yours to me. Please don't drag this
out. I have a lot on the line." Id. Brand
responded late in the afternoon, stating: "just met with
Michael. He does the transfer at 8 AM tomorrow. It should be
in your account ($600K) early tomorrow morning."
Id. Lindenfeld replied: "The earlier the
better." Id. The following morning, Golden
wired $600, 000 from Solutions' Pennsylvania bank account
into Strategies' Washington D.C. bank account. JA2745,
2874. Strategies in turn, wired the same amount from its
Washington D.C. bank account to Lord's bank account in
Virginia. JA2874, 6549. Around noon, Brand telephoned
days following the exhaustive efforts to meet the January 31
loan repayment deadline, four more telephone calls took place
between Brand and Fattah.Naylor learned at some point that the loan
had been paid off. When Naylor asked Fattah about details of
the repayment, Fattah simply replied "[t]hat it went
through EAA to Solutions and it was done." JA3088.
at some point in January, EAA received notice that the
Department of Justice Office of the Inspector General (DOJ)
intended to audit its books. DOJ auditors told EAA to provide, at the
"entrance conference," documentation containing
budgetary and accounting information. EAA failed to produce
any accounting information.
Lindenfeld was no longer making demands of Brand, Brand was
still owed the remaining $100, 000 that Solutions had paid to
satisfy the Lord loan. On March 23, 2008, Brand sent Nicholas
an email outlining his efforts to contact her over the
previous two weeks about documentation on the CORE work, how
to proceed with the paperwork for the Commonwealth of
Pennsylvania, and "how we can get our proposed contract
signed and the outstanding payments made." JA2749.
Nicholas responded that evening, writing:
I can appreciate your urgency however I do have EAA work that
I continue to do, including the [usual] facilitation of
programs, our financial audit, the start-up of two new
programs[, ] and of course the DOJ audit. I am still trying
to obtain a line of credit without a completed 2007 audit and
things are getting a little uncomfortable now as I try to
keep us afloat.
JA6576. Nicholas told Brand that the DOJ auditors were making
demands and would soon be on site. She noted that
"[t]hey are still very uncomfortable with your contract
amongst other things and depending on their findings some of
the funding received may have to be returned."
Id. Nicholas said that she had submitted the
paperwork to the state, and she told Brand that "in the
future . . . as a result of the DOJ audit I will not be in a
position to do another contract such as this."
after Nicholas's reply to Brand, Nicholas forwarded the
Brand-Nicholas email chain to Fattah. The body of the email
stated, in its entirety: "I really don't appreciate
the tone of Bob's email. I can appreciate that he has
some things going on however I am doing my best to assist
him. Some other things are a priority. He needs to back
off." GSA2. Later that night, Bowser sent Fattah an
email with a subject line that read "Karen N" and a
telephone number. JA2752.
audit continued, the auditors found other deficiencies.
During April of 2008, DOJ issued a notice of irregularity to
EAA, which resulted in the audit being referred to DOJ's
Investigations Division for a more comprehensive review.
April 24, 2008, Brand emailed Nicholas asking for a time to
update her on The Benefit Bank. In early May, Brand sent
another email to Nicholas attaching a revised EAA-Solutions
contract proposal, which decreased the initial upfront cost
from $900, 000 to $700, 000.
Solutions and EAA had still not signed a contract, EAA paid
Solutions another $100, 000 in May. That money was obtained
via a loan to EAA from CORE. Thomas Butler, who had worked
for Fattah both when Fattah was in Congress and when he was
in the General Assembly, was CORE's executive director.
Butler had been contacted in mid-May by Jackie Barnett, a
member of CORE's Board who had also worked with
Congressman Fattah. Barnett informed Butler that Nicholas had
requested a loan from CORE to EAA, and that Fattah, as
Chairman of CORE's Board, had approved it. Butler and
Barnett withdrew funds from two CORE bank accounts and
obtained a cashier's check, dated May 19, in the amount
of $225, 000 and made payable to EAA. The withdrawals were
from accounts used for Sallie Mae funds and other scholarship
EAA received the $225, 000 check, EAA tendered a $100, 000
check to Solutions. The check bore the notation
"Commonwealth of Pennsylvania." EAA repaid CORE the
following month. Because EAA lacked sufficient funds of its
own to cover this payment, EAA drew on grant money that it
had received from NASA.
and Lindenfeld continued to communicate concerning The
Benefit Bank. In July of 2008, a meeting was held at
Solutions with Brand, Lindenfeld, Golden, and other Solutions
employees to discuss "an enormous amount of work"
that Brand wanted Strategies to do. JA1670. Lindenfeld said
in response "we'd be glad to do that, but . . . we
would have to be paid." Id. At that point,
someone in the meeting stated that Strategies "had
already been paid" $600, 000. Id. Lindenfeld
replied: "well, that was for Congressman Fattah, . . .
that's not for us. So if you want us to do work, we have
to get paid for it separately." Id. Brand
became upset with Lindenfeld over his comment about being
paid because his colleagues at Solutions were not aware of
the reason for the $600, 000 payment.
EAA was attempting to meet the demands of the DOJ auditors,
who were focused on the relationship between EAA and CORE.
DOJ served a subpoena upon Solutions to produce "[a]ny
and all documents including, but not limited to, contract
documents, invoices, correspondence, timesheets, deliverables
and proof of payment related to any services provided to or
payments received" from CORE or EAA. JA2350.
Agent Dieffenbach, from the DOJ, interviewed Nicholas on July
14, 2008. During that interview, Nicholas discussed the
relationship between EAA and CORE, how invoices were paid,
and how consultants were handled. Nicholas also answered
questions about EAA's relationship with Solutions,
including the payment of invoices. She did not inform Agent
Dieffenbach of the $500, 000 payment in January or the
subsequent $100, 000 payment in May. Nor did the interview
address the EAA-Solutions contract that purportedly required
those payments, because the contract had yet to be produced.
failed to comply with the subpoena, prompting an email from
Agent Dieffenbach on August 26 asking for an update
concerning Solutions' reply to the DOJ subpoena.
Solutions then produced an undated version of the
EAA-Solutions contract that required the $600, 000 upfront
payment. Neither Brand nor Nicholas provided the auditors
with the January and May checks from EAA to Solutions.
to conceal the repayment of the Lord loan and to promote the
political and financial interests of Fattah continued. The
FFM campaign reports indicated in-kind contributions of debt
forgiveness by SLA even though there had been no actual debt.
In September of 2009, with EAA's ledgers still under
scrutiny, Nicholas altered the description of the entry for
the $100, 000 check to Solutions from "professional fees
consulting" to "CORE Philly." JA2546. Other
FFM campaign debt was reduced further after Vederman
negotiated with creditors.
never fully recovered from its payment of the $600, 000
balance on the Lord loan and the audits that took place in
2008. It began laying off employees in 2011, and by June of
2012, only four employees remained. JA3659. EAA ceased
operations at some point in 2012. JA1530.
The College Tuition Component of the FFM Scheme
the FFM campaign was close to insolvent, it nevertheless made
tuition payments for Fattah's son, Chaka Fattah Jr., also
known as Chip. Chip attended Drexel University, but had yet
to complete his coursework because he had failed to pay an
outstanding tuition balance. As the FFM campaign got underway
in 2007, Fattah wanted Chip to re-enroll in classes at Drexel
and get a degree. Fattah asked Naylor to help financially,
and he did so by writing checks from SLA to Drexel toward
Chip's outstanding tuition. By October of 2007, Chip was
permitted to re-enroll in classes.
Naylor never directly addressed the issue with Fattah, he
agreed to assist with Chip's outstanding tuition with the
expectation that SLA would be repaid. The first check to
Drexel in the amount of $5, 000 was sent in August of 2007,
with $400 payments in the months that followed until August
of 2008. At some point, Chip informed Naylor that the payee
was no longer Drexel, but Sallie Mae. Naylor then began
sending monthly checks from SLA to Sallie Mae. Those
payments, in the amount of $525.52, began in March of 2009
and continued until April of 2011, after which Fattah told
Naylor he no longer needed to make them. SLA's payments
to Drexel and Sallie Mae totaled $23, 063.52.
expectation of repayment was eventually realized. Beginning
in January of 2008 and continuing until November 2010, Bowser
sporadically sent SLA reimbursement checks from the FFM
campaign with a notation that payment was for "election
day operation expenses." JA3136. The FFM funds had been
transferred from the Fattah for Congress campaign. These
reimbursement checks totaled $25, 400. In an effort to
conceal the source of the payments to Drexel and Sallie Mae,
and to make it appear that the younger Fattah had performed
services for SLA, Naylor created false tax forms for Chip.
Chip, however, had never performed services for SLA.
The NOAA Grant and the Phantom Conference
mid-December 2011, when EAA was experiencing serious
financial difficulties, Nicholas submitted an email request
to the educational partnership program of the National
Oceanic & Atmospheric Administration (NOAA) for a grant
"designed to provide training opportunities and funding
to students at minority serving institutions" interested
in science, technology, engineering, and math fields related
to NOAA's mission. JA3354-55. The request sought $409,
000 to fund EAA's annual conference scheduled for
February 17-19, 2012. Jacqueline Rousseau, a supervisory
program manager at NOAA, participated in a conference call
with Nicholas shortly thereafter and advised Nicholas that
the agency could not afford the $409, 000 request but would
consider a smaller grant. Rousseau advised Nicholas that EAA
would need to submit an application if it wished to be
considered for a grant.
submitting a grant application, Nicholas emailed Rousseau
about sponsoring the conference. On January 11, 2012,
Rousseau informed Nicholas that the "NOAA Office of
Education, Scholarship Programs has agreed to participate and
provide sponsorship funds of $50K to support the referenced
conference." JA6453. Rousseau also informed Nicholas
that Chantell Haskins, who also worked with the student
scholarship program, would be the point of contact for NOAA.
February 2012, EAA held its annual conference at the Sheraton
Hotel in downtown Philadelphia. The conference had been held
at the same location each year since 2008.
contacted Haskins at some point in early 2012, inquiring
about the $50, 000 grant. On May 8, 2012, Haskins sent
Nicholas an e-mail which included information about
submitting proposals to fund a conference for students. EAA
then submitted a grant application, which Haskins reviewed.
She advised Nicholas on June 28, 2012 that the grant could
not be used to provide meals, and that the date of the
conference would have to be pushed back, with the new date
included in a modified application. When Nicholas asked if
expenses from a previous conference could be paid from the
new grant, Haskins informed her that this was not allowed.
early July 2012, Nicholas sent a modified grant proposal to
Haskins. It eliminated the budget item for food and changed
the date of the 2012 conference to October 19-21, 2012 at the
same Sheraton Hotel in Philadelphia where EAA's annual
conference had taken place earlier in the year. NOAA approved
a $50, 000 grant for the October 2012 conference-a conference
that would never be held.
that no October 2012 conference had taken place, NOAA allowed
Nicholas access to the $50, 000 grant in March of 2013. She
then transferred the entire amount from NOAA to EAA's
bank account a few days later. Naylor had performed services
for EAA for which he was still owed $116, 590. JA3119. In
discussions with Naylor, Nicholas had informed him that the
likelihood of EAA's being able to pay him was "[n]ot
very good." JA3120. Yet several days after EAA had
received the $50, 000 from NOAA, Nicholas sent Naylor a check
for $20, 000. JA3120, 4283.
April 3, 2013, Nicholas submitted a final report to NOAA
concerning EAA's use of the grant. Notably, page 4 of the
report stated the conference had been held in February 2012,
while page 17 stated that the conference had been held from
October 19 to 21, 2012. NOAA issued a notice asking for
clarification and for a list of students who had been
supported at the conference. Nicholas failed to file either a
clarifying report regarding the date of the conference or a
timely report regarding the disbursement of the grant.
Finally, in November of 2013, Nicholas submitted the final
Federal Financial Report in which she certified, falsely,
that the $50, 000 had been used for a project during the
period from August 1, 2012 to December 30, 2012.
The Blue Guardians Scheme
addition to functioning as the conduit for Lord's $1
million loan to Fattah's campaign, Lindenfeld's
company, Strategies, also performed services for the
campaign. The work resulted in indebtedness from FFM to
Strategies of approximately $95, 000. Fattah made several
small payments, but failed to pay the full amount due.
Although Lindenfeld spoke to Fattah, Naylor and Bowser about
the debt, no payments were forthcoming. During a meeting in
Fattah's D.C. office, Fattah told Lindenfeld "that
[repayment] really wasn't going to be possible because
the campaign had been over for a long time" and the
funds were not available. JA1693. Fattah then asked
Lindenfeld if he could write off the debt on his FFM campaign
finance reports. Id. Lindenfeld told Fattah that as
long as he was paid, it was not his business how Fattah
disclosed it on the campaign finance reports. JA1694.
of repayment, Fattah suggested that Strategies could claim to
be interested in setting up an entity to address
environmental issues and ocean pollution along the coastline
and in the Caribbean. Fattah explained that creating such an
entity would make it possible to obtain an appropriation from
the government. Hearing this, Lindenfeld knew he was not
going to be paid by the FFM campaign, and was amenable to
receiving money from an appropriation instead. At a later
meeting, Lindenfeld told Fattah that the name of the entity
would be "Blue Guardians." Lindenfeld consulted
with an attorney about creating Blue Guardians as an entity
to receive the federal grant. He emailed Fattah, asking
questions about how to complete an application to the House
Appropriations Committee. Fattah provided suggestions, and an
application was eventually completed. It indicated that Blue
Guardians would be "in operation for a minimum of ten
years," and, in accordance with Fattah's guidance,
requested $15 million in federal funds. JA1711- 13.
submitted the application to Fattah's office in April of
2009. Afterward, a Fattah staffer contacted Lindenfeld to
suggest that he change his Washington, D.C., address to
Philadelphia because that was the location of Fattah's
district. Fattah later suggested to Lindenfeld that Brand
might allow the use of his Philadelphia office address, a
plan to which Brand agreed.
February 2010, Lindenfeld submitted a second application to
the Appropriations Committee. In March, Fattah submitted a
project request using his congressional letterhead and
seeking $3, 000, 000 for the "Blue Guardians, Coastal
Environmental Education Outreach Program." JA6432.
Within a month, Blue Guardians had both articles of
incorporation and a bank account. Around that time, a news
reporter contacted Lindenfeld to discuss the new Blue
Guardians entity. The inquiry made Lindenfeld uncomfortable,
and he ultimately decided to abandon the Blue Guardians
project. He continued to seek payment from Fattah, to no
having obtained Lindenfeld's acquiescence to writing off
the campaign's debt to Strategies, Fattah started
falsifying FFM's campaign reports. Beginning in 2009 and
extending through 2013, the FFM campaign reports executed by
Fattah and Bowser stated that Strategies made in-kind
contributions of $20, 000, until the debt appeared to have
been paid in full.
The Fattah-Vederman Bribery Scheme
and Fattah were personal friends. Vederman was a successful
businessman who had also served in prominent roles in the
administrations of Ed Rendell when he was Mayor of
Philadelphia and Governor of Pennsylvania. In November of
2008, Vederman was a senior consultant in the government and
public affairs practice group of a Philadelphia law firm. His
assistance to the FFM campaign included paying for rented
vans used in the get-out-the-vote effort.
Fattah's electoral defeat, the campaign still owed more
than $84, 000 to a different law firm for services performed
for the campaign. Vederman approached that firm in the summer
of 2008 asking if it would forgive FFM's debt.
Negotiations resulted in a commitment from FFM to pay the
firm $30, 000 by the end of 2008 in exchange for forgiveness
of $20, 000, all of which would appear on the FFM campaign
finance report. Vederman's efforts also led to payment by
Fattah of an additional $10, 000 in 2009 to the law firm, in
exchange for additional forgiveness of $20, 000 of debt. It
was not long after Vederman's successful efforts to lower
Fattah's campaign debt, that Fattah wrote a letter to
U.S. Senator Robert P. Casey recommending Vederman for an
point in 2010, Vederman again intervened on behalf of the FFM
campaign. FFM remained in debt to an advertising and public
relations firm owned by Robert Dilella. By late 2011,
Vederman and Dilella had worked out a settlement to resolve
the outstanding debt. Pursuant to that settlement, Dilella
received partial payment from the FFM campaign: $25, 000 in
satisfaction of a $55, 000 debt. Dilella testified at trial
that he would not have agreed to retire a portion of the debt
had he known the FFM campaign was paying college tuition for
helped Fattah financially in other ways. Before the 2006 FFM
campaign, Fattah and his wife, Renee Chenault-Fattah,
sponsored a young woman named Simone Muller to live with them
as an au pair exchange visitor. Muller was from South Africa,
and her J-1 visa allowed her to serve as a nanny and to study
in the United States. Muller later applied for and received a
second visa, an F-1 student visa that indicated she had been
accepted as an international student at the Community College
of Philadelphia. The application indicated that Muller would
again be residing with the Fattahs. Notwithstanding this
living arrangement, Fattah identified Vederman as the person
who would be paying for Muller's trip to the United
beginning of 2010, Muller wished to transfer to Philadelphia
University. This required her to submit verification that
funds were available to pay for her study. Although the
Fattahs were Muller's sponsors, Fattah explained to the
University's Dean of Enrollment Services that he was
submitting a letter of secondary support from Vederman.
JA3754, 3763-65, 6504. Without Vederman's January 2010
letter of support, the University would not have admitted
Muller. In addition to this pledge of support, Vederman paid
$3, 000 of Muller's tuition. Shortly thereafter, Fattah
resumed his efforts to secure an ambassadorship for Vederman.
February of 2010, Fattah staffer Maisha Leek contacted
Katherine Kochman, a scheduler for White House Chief of Staff
Rahm Emanuel. Leek requested a telephone conference with
Emanuel, Rendell, and Fattah to discuss Vederman's
"serving his country in an international capacity."
JA2893. In a follow-up email on March 26, Leek sent documents
to Kristin Sheehy, a secretary to White House Deputy Chief of
Staff James Messina. The documents included Fattah's 2008
letter to Senator Casey and Vederman's biography. After
participating in a telephone conference about Vederman with
Fattah and Rendell, Messina sent Vederman's biography to
the White House personnel office for consideration.
April 2010 tax deadline approached, Fattah still owed the
City of Philadelphia earned income tax in the amount of $2,
381. Just days before the filing deadline, Vederman gave a
check to Chip Fattah for $3, 500. The younger Fattah quickly
deposited $2, 310 into his father's bank account. Fattah
paid his tax bill on April 15. Without Chip's deposit
into his father's bank account, the older Fattah would
not have had sufficient funds to pay his tax bill.
October 30, 2010, Vederman gave Chip another check, this one
for $2, 800. That same day, Fattah hand-delivered a letter to
President Obama recommending Vederman for an ambassadorship.
A few weeks later, Fattah's staffer, Leek, sent the
letter that Fattah had given to President Obama to
Messina's office. That letter pointed out that both
Rendell and Fattah had sent letters on behalf of Vederman,
and that he was an "unquestionably exceptional candidate
for an ambassadorship." JA6291-92.
efforts to secure Vederman an ambassadorship were
unsuccessful. Fattah then shifted gears and sought to secure
Vederman a position on a federal trade committee. Fattah
approached Ron Kirk, who served as U.S. Trade Representative,
and asked him to speak with a constituent. In May of 2011,
Leek followed up on that discussion by emailing Kirk and
asking him to meet with Vederman. Kirk met with Vederman on
June 5, 2011 and explained to him the role of the trade
advisory committees. Although the two men "had a very
nice conversation," JA 3566, it soon became "pretty
apparent to [Kirk and his staff] that [serving on a trade
advisory committee was] not what Mr. Vederman was interested
in." JA3567. As Kirk put it, "it was obvious that
[Vederman] was looking for something perhaps more robust in
his mind or . . . higher profile than one of our advisory
committees." Id. Given Vederman's lukewarm
interest, no appointment to an advisory committee was
December 2011, the Fattahs applied for a mortgage so they
could purchase a second home in the Poconos. Shortly after
applying for the mortgage, Fattah emailed Vederman, offering
to sell him his wife's 1989 Porsche for $18, 000.
Vederman accepted the offer. The next day, Vederman wired
$18, 000 to Fattah's Wright Patman Federal Credit Union
Credit Union Mortgage Association (CUMA) acted as the loan
processing organization for the home mortgage. Because CUMA
is required to verify the source of any large deposits,
CUMA's mortgage loan processor, Victoria Souza, contacted
Fattah on January 17, 2012, to confirm the source of the $18,
000. Fattah informed Souza that the $18, 000 represented the
proceeds of the Porsche sale. Souza requested documentation,
including a signed bill of sale and title.
same day, Bowser emailed Vederman a blank bill of sale for
the Porsche. After Vederman signed the bill of sale, Fattah
forwarded it to Souza. The bill of sale was dated January 16,
2012, which was the day before Souza had requested
the documentation. It bore the signatures of Renee
Chenault-Fattah and Herbert Vederman, with Bonnie Bowser as a
also provided Souza with a copy of the Porsche's title.
It was dated the same day it was sent to Souza, and bore
signatures of Chenault-Fattah as the seller and Vederman as
buyer, along with a notary's stamp. Neither Vederman nor
Chenault-Fattah actually appeared before the notary.
never took possession of the Porsche. Renee Chenault-Fattah
continued to have the Porsche serviced and insured long after
the purported sale had taken place. Moreover, the Porsche
remained registered in Chenault-Fattah's name, and was
never registered to Herbert Vederman. When FBI agents
searched the Fattahs' home in 2014, the Porsche was
discovered in the Fattahs' garage.
January 24, 2012, the Fattahs wired $25, 000 to the attorney
handling the escrow account for the purchase of the vacation
home. Without the $18, 000 transfer from Vederman, the
Fattahs would not have had sufficient funds in their bank
accounts to close on the home.
the same time that the Fattahs were purchasing the house in
the Poconos, Fattah's Philadelphia office hired
Vederman's longtime girlfriend, Alexandra Zionts. Zionts
had long worked for a federal magistrate judge in Florida.
Near the end of 2011, the magistrate judge retired, leaving
Zionts ten months shy of obtaining the necessary service
required to receive retirement benefits. If Zionts could find
another job in the federal government, her benefits and
pension would not be adversely affected. Vederman assisted
Zionts in her job search, which included calling Fattah.
Fattah hired her, a move that put his congressional office
overbudget. Zionts worked in Fattah's office for only
about two months, leaving to work for a congressman from
Watson, who performed constituent services for Fattah and
worked on the same floor as Zionts in Fattah's district
office, testified she had no idea what work Zionts performed.
Although Zionts contacted Temple University about archiving
Fattah's papers from his career in both the state and
federal government, an employee from Temple University
observed that Zionts' work contributed nothing of value
to the papers project.
The Indictment and Trial
schemes eventually unraveled. On July 29, 2015, a federal
grand jury in the Eastern District of Pennsylvania returned a
twenty-nine count indictment alleging that Fattah and his
associates had engaged in a variety of criminal acts. Fattah,
Vederman, Nicholas, Brand, and Bowser were charged with
unlawfully conspiring to violate the Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 U.S.C. § 1962(d).
In addition to the RICO charge, the indictment alleged that
Fattah and certain co-defendants had unlawfully conspired to
commit wire fraud, 18 U.S.C. §§ 1343, 1349; honest
services fraud, 18 U.S.C. §§ 1343, 1346, 1349; mail
fraud, 18 U.S.C. §§ 1341, 1349; money laundering,
18 U.S.C. § 1956; and to defraud the United States, 18
U.S.C. § 371. Several defendants were also charged with
making false statements to banks, 18 U.S.C. § 1014;
falsifying records, 18 U.S.C. § 1519; laundering money,
18 U.S.C. § 1957; and engaging in mail, wire, and bank
fraud, 18 U.S.C. §§ 1341, 1343, and 1344.
RICO charge alleged that the defendants and other
co-conspirators constituted an enterprise aimed at supporting
and promoting Fattah's political and financial interests.
The efforts to conceal the $1 million Lord loan and its
repayment are at the heart of the RICO conspiracy and the
Fattah for Mayor scheme. The indictment further alleged that
the RICO enterprise involved: (1) the scheme to satisfy an
outstanding campaign debt by creating the fake "Blue
Guardians" nonprofit; and (2) the bribery scheme to
obtain payments and things of value from Vederman in exchange
for Fattah's efforts to secure Vederman an appointment as
a United States Ambassador.
trial, before the Honorable Harvey Bartle III of the Eastern
District of Pennsylvania, began on May 16, 2016, and lasted
about a month. Judge Bartle
charged the jury on Wednesday, June 15, 2016, and
deliberations began late that afternoon. The following day,
after deliberating for only four hours, the jury sent a note
to the judge. Written by the foreperson, the note read:
Juror Number 12 refuses to vote by the letter of the law. He
will not, after proof, still change his vote. His answer will
not change. He has the 11 of us a total wreck knowing that we
are not getting anywhere in the hour of deliberation
yesterday and the three hours today. We have zero verdicts at
this time all due to Juror Number 12. He will not listen or
reason with anybody. He is killing every other juror's
experience. We showed him all the proof. He doesn't care.
Juror Number 12 has an agenda or ax to grind w/govt.
after receiving the foreperson's note, the Court received
a second communication-a note signed by nine jurors,
including the foreperson. The second note read:
We feel that [Juror 12] is argumentative, incapable of making
decision. He constantly scream [sic] at all of us.
Bartle met with counsel in his chambers and advised them of
his intention to voir dire both the foreperson and
Juror 12 in an effort to determine whether the juror was
deliberating as required by his oath. The Judge also
indicated that he would "stay away from the merits of
the case," and that whether he would voir dire
more jurors "remain[ed] to be seen." JA5917.
for the defendants objected to the Court's proposed
inquiry. As a group, they indicated that while the note
could be read as suggesting "a flat refusal to
deliberate," they were of the opinion that it sounded
"more in the manner of a disagreement over the
evidence." JA5918. Nicholas's counsel specifically
argued that questioning the jurors so quickly after the start
of deliberations would send a message that differences of
opinion among a block of jurors could be resolved by
complaining to the Court. Defense counsel acknowledged that
the case law gave Judge Bartle wide discretion on how to
proceed, but suggested that a "less intrusive"
course of action was preferred. JA5918-19. They collectively
urged the Court to do nothing more than remind the jurors of
their duty to deliberate.
Government agreed with Judge Bartle's proposed voir
dire. In the prosecution's view, the Court had
already given proper instructions to the jury on their duty
to deliberate. The Government further argued that if Juror 12
had exhibited bias, as suggested in the notes, he would have
lied during the voir dire process and his refusal to
deliberate would be "further evidence of that and his
unsuitability as a juror." JA5921.
all counsel present, and over defense counsel's
objections, Judge Bartle ultimately questioned five jurors in
chambers. He questioned Juror 2 (the foreperson), Juror 12
(the subject of the complaints), Juror 3, Juror 6, and Juror
Bartle began each voir dire by informing the juror
that he would ask a series of questions, but would not
inquire into the merits of the case or how any juror was
voting. Each juror was placed under oath, and Judge Bartle
asked, among other questions, whether screaming was
occurring; whether the jurors were discussing the evidence;
whether Juror 12 was placing his hands on other jurors; and
whether Juror 12 was unwilling to follow his instructions.
foreperson acknowledged that he had written the initial note
during lunch earlier that day. He stated that Juror 12 was
not willing to follow the law, but instead "want[ed] to
add his own piece of the law . . . which has nothing to do
with it." JA5927-28. The foreperson further testified
that Juror 12 "was standing up screaming" and that
"[i]t was everybody pretty much against [Juror
12]." JA5929. He testified that Juror 12 "has his
own agenda," and that Juror 12 put his hand on another
juror. JA5930. The foreperson also stated that the jury had
discussed only a single count since the day before, and that
they were still discussing it. When the District Court
responded that the jurors should understand that they could
take as much time as they needed, the foreperson responded:
"I understand that. . . . [W]e all understand it. But we
feel that he's just- he's got another agenda."
Bartle advised counsel that he considered this "a very
serious situation" and that he would proceed to voir
dire Juror 12. JA5937. Fattah's counsel renewed his
objection to questioning Juror 12, which the Court overruled.
Brand's counsel argued that because the Court had decided
to voir dire Juror 12, it should also voir
dire an additional juror. The Court agreed to do so.
the Court questioned Juror 12, he admitted to having
"yelled back" at others, but only when they raised
their voices to him. JA5939. Juror 12 contended that he, in
fact, was "the only one" deliberating. Id.
When an initial vote was taken the previous afternoon, his
vote "was different than everybody else's."
Id. Juror 12 explained to the other jurors why his
vote was different, bringing up specific evidence. In
response, the other jurors said "that doesn't mean
anything" and "pointed to the indictment."
JA5940. Juror 12 told the other jurors that the indictment is
not evidence. Id. In response, the others
"threatened to have [him] thrown off." Id.
12 testified that a similar sequence of events had taken
place that morning. After a brief period of deliberations,
another vote was taken, and with the same result as the
previous afternoon. A discussion ensued, and the other jurors
again "point[ed] to the indictment." Id.
Juror 12 told them to "read the charge,"
"[t]he indictment is not evidence." Id.
They read the charge, and Juror 12 again attempted to explain
his view, but the other jurors paid little attention.
Accordingly, Juror 12 told the others that if they did not
want him there, he ...